Ask Question
BusinessBusiness
1 March, 05:39

You decide to invest in a bond with a 10% coupon paid semi-annually every February 1st and August 1st. The bond is currently selling at an asking price of 101.25. What price should you pay for this bond today (if today's date is May 1st) ? $1,012 $1,037.50 $1,012.50 $1,037

+1
Answers (1)
  1. 1 March, 06:25
    0
    The question is missing an important information. 'The bond is currently selling at an asking price of 101.25' In this part there should have been a date at which date the bond was selling at 101.25.

    Nevertheless, I will provide with the calculation, if you find out the date, just plug in the value in it and you will get the answer.

    The bond price mentioned is $ 101.25 percent of par, which would be $ 1012.5. Since, it is asking for price at May 1st then you know that it has been 89 days since the last semi-annual coupon was paid (February 1st (28) + March (31) + April (30) = 89 days.

    The missing date (from the question) will be divided by 89 days. The answer will be added to $1012.5.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You decide to invest in a bond with a 10% coupon paid semi-annually every February 1st and August 1st. The bond is currently selling at an ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
A bond with face value $1,000 has a current yield of 6% and a coupon rate of 8%. a. If interest is paid annually, what is the bond's price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b.
Answers (1)
Anna would like to incorporate her plumbing business, which is located in Flagstaff, Arizona. Where can she find out the requirements for incorporation? a. Arizona statuteb. federal statutec. state constitutiond. city ordinance
Answers (1)
First Choice Carpets is considering purchasing new weaving equipment costing $ 734 comma 000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $ 214 comma 000 2 214 comma 000 3 254 comma 000 4
Answers (1)
M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1. Total gross sales for the period include the following: Credit card sales (discount 3%) $8,400 Sales on account (1/15, n/60) $10,500 Sales returns
Answers (1)
A portfolio manager liked a new product that included a swap, a financial derivative. Since he had the authority, he proceeded without asking any other departments about it.
Answers (1)
New Questions in Business
An insured purchased an insurance policy 5 years ago. last year, she received a dividend check from the insurance company that was not taxable. this year, she did not receive a check from the insurer.
Answers (1)
An investor shorts 100 shares when the share price is $50 and closes out the position six months later when the share price is $43. The shares pay a dividend of $3 per share during the six months. What is the investor's profit or loss? a.
Answers (1)
Which term refers to the beginning of the constitution?
Answers (1)
The risks of a focus strategy include: a. decisions by focused competitors to use their resources to serve a wider range of customers' needs. b.
Answers (1)
Floyd Industries stock has a beta of 1.30. The company just paid a dividend of $.30, and the dividends are expected to grow at 4 percent per year. The expected return on the market is 13 percent, and Treasury bills are yielding 4.5 percent.
Answers (1)
Home » Business » You decide to invest in a bond with a 10% coupon paid semi-annually every February 1st and August 1st. The bond is currently selling at an asking price of 101.25.
Sign Up Forgot Password?